High-quality products spur growth of furniture - Hot Growth Categories

Discount Store News, Oct 2, 1995

Will furniture, last year's largest growth category according to DSN's productivity study, pull another remarkable sales explosion in'95?

Many retailers think so.

In fact, the $34 billion category, which grew by 25% last year over 1993, was mentioned by enough retailers in a recent DSN survey that it became the No. 7 ranked growth category prospect for the coming year. When asked to name the categories retailers feel will show the greatest sales gains in the next 12 to 18 months, nearly one in eight mentioned furniture.

Buyers were bullish on the category, convinced of furniture's magic. More than one in five buyers said they expected furniture to produce among the greatest sales gains in stores over the coming year, higher than all other categories except for computer software and accessories (No. 1), and domestics (No. 2).

Ames' president Joe Ettore expressed strong confidence in the furniture category at a DSN Power Retailers conference held in late July.

"Domestics and furnishings - not so much appliances - are where people spend their money. In 75 stores, we've cut 25% to 30% space from our crafts department, which was oversized and gave it over to domestics and furniture," he said.

Hills president Jack Smailes spoke about the category with similar confidence. "Ready-to-assemble assemble furniture is a strong growth area," he said. "The quality of RTA product appearance has improved, and customers reward new standards."

Paul Powers, dmm, home decor, Hills, agreed with Smailes and said that the category has grown dramatically over the past few years as manufacturers increased the quality levels, aesthetics and ease of assembly.

"Product innovation [solid wood RTA, improved finishes, quick assembly] will continue to drive this category," Powers said. "Its sales potential in the discount channel is limited only by freight, handling and space productivity considerations. The category will continue to grow, albeit at a more moderate rate. The average price points should continue to rise."

Freight, in particular, is a potential roadblock to growth. Target, for example, traditionally refuses RTA products that weigh more than 100 lbs. Hence, the retailer stocks an aesthetically pleasing assortment of Furio (private label brand) telephone stands, night stands and collapsible accent pieces. Scant are the offerings of entertainment centers, large bookcases and other new additions to the category, like beds and computer armoires, that are driving forces in the category.